Ex-Wall Streeter Raises $16.5 Million More For LearnVest, An Affordable Financial Planner For The 99%

LearnVest, a financial
planning startup founded by Alexa Von Tobel, has raised $16.5
million to continue building an affordable money management
solution. Investors include Accel Partners, which led LearnVest's
earlier $20 million round of financing; American Express
Ventures; Claritas Capital; Carlyle Group's Ed Mathias; and
former T. Rowe Price CEO Todd Ruppert.

LearnVest has raised more than $40 million to date. Its last
round of financing valued the company at about $100 million.

Von Tobel, a former Morgan
Stanley trader and Harvard Business School drop-out, likens her
company to "Weight Watchers for money." And in fact, the former
CFO of Weight Watchers, Ann Sardini, is one of LearnVest's four
new advisors. Others include Gilt Groupe's Susan Lyne, Mathias
and Ruppert. LearnVest is also opening a new office in Phoenix,
Arizona,where it will train the Certified Financial Planners
(CFPs) it hires. LearnVest currently has 25 on staff and between
80 and 100 employees total.

LearnVest's CFPs work
one-on-one with clients to help them save money. They can not,
however, buy and sell stocks for them. Unlike traditional financial planners which
may take between 2 and 2.5 percent of an account with less than
$100,000 under management, LearnVest costs a few hundred dollars
to use. Its rates resemble gym memberships with a set up fee
followed by monthly charges of $19.

Once users sign up, they have an initial call and are assigned to
one of LearnVest's CFPs. Then they enter a customized 7-part
program to set goals and get their savings on track.

It's a great idea in theory, but Von Tobel made a casual comment
during our call which could actually hint at a flaw in her
business model.

"Alyson, I'm sure you don't think about financial planning much,
but I think about it every second of every single day," she
joked.

She's right. I don't think about financial planning at all. I pay
monthly bills, stay out of debt, keep an eye on savings and call
it a day. I'm self-reliant and thus unwilling to pay even a few
hundred dollars for Von Tobel's service.

But I'm LearnVest's target demographic. Von Tobel says
LearnVest's subscribers are men and women between the ages of 25
and 55, they are college educated and have household incomes that
exceed $60,000.

With that said, Von Tobel says
people are more likely to subscribe to LearnVest after a big life
moment: buying a house, having a child or getting married. None
of those describe me. And on the opposite end of the spectrum,
Von Tobel
has a few millionaires using her service because it's a relatively cheap and
easy solution.

There's another concern. While LearnVest may be a steal
from a consumer perspective, it's not clear if the low prices
will sustain the company. With LearnVest's current pricing
structure, it only generates $300 to $600 per customer in the
first year and $228 every year after. LearnVest needs nearly
2,000 paying customers to generate $1 million.

Von Tobel wouldn't say how many paying subscribers LearnVest has,
just that the company has grown 200% in the past year. It grew
300% the year prior. Her new investor, American Express, may help
boost growth even more. Von Tobel hinted that her product would
soon be "distributed to a lot of people quickly."

American Express Ventures' Managing Partner Harshul Sanghi
indicated a strategic partnership in a release. He said:
"As we seek to expand our
portfolio of products across American Express, we believe
LearnVest Planning can be an important partner in
helping us to bring customers more convenient, affordable and
transparent ways to manage their money."

For more on Von Tobel's plans
to take on Wall Street, or for how LearnVest works,
click here.